Fact Check: Windows 8 Pricing Identical to That for Windows 7

There's been a lot of whining this week. It's all unnecessary

Jan. 19, 2013 Paul Thurrott

In the wake of this week’s announcement about pending changes to Windows 8 upgrade pricing, there’s been a lot of outrage about Microsoft “jacking up” the price of the new OS. But here’s a shocker: Windows 8 will soon cost exactly the same as Windows 7 did before it. So instead of looking at this as some kind of disaster, why not just appreciate the months of low-cost upgrades we’ve received?

If this event proves anything, it’s that people won’t be happy no matter Microsoft does. Well, that and that many seem to have selected memories.

Here’s what really happened.

Last year, in the months leading up to the release of Windows 8, Microsoft revealed two limited-time special offers aimed at upgraders. The first, called Windows Upgrade Offer, mirrored earlier offers aimed at those who purchased a PC with a previous Windows version. In this case, the version was Windows 7, and the purchase date has to be between June 2, 2012 and January 31, 2013. You get can Windows 8 Pro Upgrade for just $14.99 (US), an incredible bargain.

The second was aimed at the normally tiny market of people who perform their own upgrades to the latest Windows version: Courtesy of a special promotion that Microsoft announced in July 2012, anyone with a qualifying PC—that is, virtually any PC on earth; it just has to have come with Windows XP, Vista, or 7—can electronically upgrade to Windows 8 Pro for just $39.99. This offer expires, as promised, on January 31, 2013.

This week, of course, Microsoft affirmed that its previously-announced promotions would be ending and that normal pricing would return. That pricing works out as follows:

Windows 8 (Core) Upgrade: $119.99

Windows 8 Pro Upgrade: $199.99

Readers have reacted with a stunning display of anger at this pricing, as it were not previously expected or that the special promotions were anything but temporary. But it’s instructive to remember how Microsoft priced the identical Windows 7 product editions when that Windows version launched. That pricing works out like this:

Windows 7 Home Premium Upgrade: $119.99

Windows 7 Professional Upgrade: $199.99

It’s identical.

Furthermore, while Microsoft did not offer special promotional pricing for Windows 7 Professional three years earlier, it did offer something called the Windows 7 Family Pack. This provided three copies of Windows 7 Home Premium Upgrade for $149.99, for a limited time, and was broadly praised for being a tremendous deal. (It was so popular Microsoft brought it back, again temporarily, during the holiday 2010 buying season.)

This past year’s special promo pricing for Windows 8 Pro was a better deal. A much better deal.

First of all, you don’t have to buy three licenses all at once. You can buy them one at a time, and can buy up to five of them.

Second, this past year’s promo was for Windows 8 Pro, a higher-end product edition, with more and better features, than the Windows 7 Home Premium version we got three years early. And yet it costs $10 less per copy purchased.

The reaction? Again: Outrage. How dare Microsoft make Windows 8 Pro available so cheaply for a pre-set period of time and then simply begin pricing it normally exactly when they previously announced they would do so. How dare they!

Folks, please.

Fact is, with the one exception of Windows 7, which artificially benefitted from a poor reception to its predecessor, virtually no one upgrades their own PCs from one version of Windows to the next. It’s fair to say that almost everyone who wanted to take advantage of the promo pricing on the Windows 8 Pro Upgrade already did so.

So what’s with the outrage?

There are other advantages to the changes we’ve seen with Windows 8 pricing, too. Microsoft did away with Full product editions because all existing PCs qualify for the upgrade. So you can save money there. And the OEM pricing for Windows 8? It’s cheaper than the Full pricing for Windows 7.

Geesh. If you want the Upgrade, just get it now. And instead of damning Microsoft for screwing you over, why not just thank them for what is quite clearly the best promotional pricing for any major Windows upgrade in history.

Discuss this Article 64

BIGZIPZ

on Jan 19, 2013

We know for a fact that Windows 8 is not selling as well as MS hoped.

This is despite the low, bargain basement price.

How on earth will increasing the price increase adoption if people were not going for the product when it cost next to nothing?

baioc

on Jan 19, 2013

All that really means is that Microsoft set their expectation too high, it does not mean Windows 8 is not selling well.

If you feel the need to compare it to the Windows 7 launch, 7 was coming after Vista, which missed its mark by a long shot. The time was right to buy. Companies did not want to hold on to XP for too much longer and 7 was there and it looked perfect.

As more PC's become available (in more form factors) 8 will definitely sell better. To me it's too early to tell.

Boots

on Jan 19, 2013

Exactly right. We can't compare the sales of Windows 8 to those of Windows 7. If Windows 7 was priced at $14.99 for the first 3 months, it would have sold ten times as many licences.

scophi

on Jan 20, 2013

Of course you compare Windows 8 sales to Windows 7 sales. What else would you compare it to? Windows 8 is the successor. It's actually a very direct comparison.

You can make excuses all you want by claiming the Vista phenomenon or a different hardware market. But those are simply reasons.

The comparison is still 100% valid. So many things compare apples-to-oranges. For once, we have an actual apple-to-apples comparison.

zicoz

on Jan 20, 2013

As PT writes in the article the vast majority of sales of Windows 8 licenses comes from new PC sales and not upgrades, so normalizing the price won't have that much of an impact.

gtirloni

on Jan 19, 2013

I think Apple has set the trend here with cheap OS upgrades. People forget though that Apple makes most of its money selling hardware. Something Microsoft doesn't.

Anyway, hardly anyone upgrades their PCs except for PC enthusiasts (like us). My mom and grandma will never upgrade anything unless it comes pre-installed in their newer laptops (which will happen).

brians (not verified)

on Jan 19, 2013

The world has changed Paul. The average selling price of notebooks last quarter was $429. A $199 upgrade price no longer makes sense. You can buy a good quality 7-inch tablet for that price.

Microsoft is looking more and more like IBM did just before its fall in the 90's. Out of touch with reality, high pricing, attempting to lock in users, milking existing customers. An arrogant belief that just because they produced it, customers would buy it.

The parallels between IBM's disaster with PS/2's and OS/2 and Microsoft with the Surface and Windows 8 are stunning. A PS/2 was an overpriced, underpowered machine that was beaten my more powerful and cheaper rivals. OS/2 was a bloated OS designed for a previous generation of chips. Essentially the same can be said for the Surface and Windows 8.

(By OS/2 here, I am referring to OS/2 1.0 which was made for 286 chips, severely limiting the OS's ability... later IBM tried to correct this but it was too late.)

pthurrott

on Jan 19, 2013

That $429 PC comes with a free copy of Windows. Which 95+ percent of users won't upgrade to a later version. So that part of the world has not changed.

brians (not verified)

on Jan 19, 2013

There is nothing "free" about the copy of Windows that ships on new computers. Microsoft charges for that, strangely, less than they are going to charge for upgrades. Does that make sense?

pthurrott

on Jan 19, 2013

It sure does. The PC maker supports Windows on new PCs. Microsoft has to support it when you buy the software upgrade, and the sheer number of PC configurations possible can make this an expensive an arduous task. That's where the diversity of the PC market, normally seen as a strength, can also be a weakness.

brians (not verified)

on Jan 19, 2013

Somehow OEMs are managing to do all of that support at a far cheaper price. Strangely, none of the OEMs in the Android world charge at all for the upgrades (where they have to do the support). Sounds like Microsoft needs a new business model.

Daelen

on Jan 19, 2013

Apart from Nexus devices, none of the OEM in the Android world provide timely updates so it's a bit of a moot point. According to Google only 1.2% of devices are on the latest version (4.2). The fact that the update is free is irrelevant because most devices released in the last 2 years won't ever even get the update.

brians (not verified)

on Jan 20, 2013

Most of the Android devices won't get the update because they are based on ARM processors that cannot handle the latest software. This is a good thing, you can get some very inexpensive Android phones. These phones usually come with Android 2.3 because that is all the extremely inexpensive processors in the phone can handle. This gives people who normally could not afford a smart phone the ability to have one. This is more important outside of the US where carriers generally do not subsidize phones.

There is starting to be a large block of tablets and phones that stay at Android 4.0 for the same reasons.

(Note Android 3.X was tablet only. Things went back together with Android 4.0.)

The Nexus devices get the upgrade immediately because that is what Nexus is all about. Things are not always smooth when a new release hits, so many people might not want a Nexus.

Makers of top-end phones generally get major upgrades to phones that can support the new software within 6 months, newer phones get the new release first. Critical updates generally occur within a week of release. Android releases frequently, far more frequently than Windows. How you can complain about Android when Windows has a 3 year upgrade cycle, mystifies me. If you enjoy being on the leading edge, get a Nexus. Why is that a problem?

ian.aldrighetti

on Jan 19, 2013

"Strangely, none of the OEMs in the Android world charge at all for the upgrades"

You can't compare that to Windows upgrades. OEM's may as well charge for Android upgrades, because then at least people would get them for their phones in a timely fashion. Right now Android devices being upgraded are completely up to the OEM's, meaning they may not do them at all (especially if they buy a cheap low-end Android phone [which let's get real, most of them are]), or could be off by months from the initial release of the update. However, if I pay my $15 (if I had bought a Windows 7 computer within the allotted time frame) for my Windows upgrade I would at least know I am GOING to get it, and when.

brians (not verified)

on Jan 20, 2013

You need to see one of my earlier replies above about how Android upgrades work.

I'm glad you believe Microsoft handles upgrades in a timely fashion. Just ask all those Windows Phone 7/7.5 users... Microsoft did a wonderful job of getting them to Windows Phone 8, didn't they?
Oh wait... they abandoned them... but don't worry, they'll get Windows 7.8, shipped yet?

milky_cereal

on Jan 21, 2013

brians you have a point about the upgrade to WP7.8, but WP 8 was a major architecture shift, so I'm not sure what they were supposed to or could have done to upgrade them.

Anyway, we can't be comparing phone upgrades to Windows upgrades, at least not at this juncture. Phones are kept at most two years, many upgraded earlier. A modern Windows computer can last many more years. I had a desktop that ran Vista from release, was upgraded to 7, and lasted me 6 years. It's not too hard to keep hardware in service for at least 4 years without any significant degradation in performance for the vast majority of users (tech types notwithstanding).

Regarding Andorid, yes it is free (I use Android myself so I'm not knocking the platform). However, in order to get the best experience, you must license the Google Play store and other Google apps that are vital to the Android experience users expect. Unless you are Amazon, but then you have a huge cost of entry making your own infrastructure. In either case, that is why these cheapo Android tablets are available at such low costs, and explains why they are so horrible.

klamation

on Jan 21, 2013

I wish you could see your own post defending Android OEM devices' lack of upgrades, and then complaining about Windows Phone OEM devices' lack of upgrades. The reasons are the same, and I'm glad Microsoft is trying to move forward with WP8 and its enhanced requirements.

For testing purposes at work, I had to buy multiple Android phones off-contract, and they were between $650 - $700. Why? Because I need to support 2.3 and earlier devices that are still predominant in the market. That is more expensive than the average price you quoted for a laptop complete with a full version of Windows.

pthurrott

on Jan 21, 2013

The reasons aren't the same.

Microsoft has always wanted to provide continuous Windows Phone upgrades to users. In fact, they thought that the wireless carriers agreed with this and supported it. They were surprised to discover otherwise.

Android devices are made by far more companies, and there are far more models. These companies couldn't care less if the software is ever upgraded. And the fragmentation that you're complaining about--understandably--certainly hasn't stemmed Android's market growth, just as it's not the reason for WP's slow growth. It's a non-issue.

developer

on Jan 19, 2013

Android is open source, it is available to all manufacturers for free, and they can modify it to fit to their needs.

Microsoft is selling Windows Phone 8 and Windows 8 to them.

Waethorn

on Jan 19, 2013

Actually, if you really talk to Microsoft Partner Support, they will tell you that the price that big OEM's pay for licensing is not that much cheaper than what you pay for a System Builder copy. In some cases, System Builders often get promotions where OEM's are in a fixed contract. And System Builder copies aren't much cheaper than a retail upgrade when you figure in the average markup for all of the components in a PC.

zorb58

on Jan 19, 2013

Microsoft is not milking existing customers at all... They're using their current size to innovate a product like Windows 8 that they believe will put them firmly in markets of the future, namely tablets and phones. This is the opposite of IBM's arrogance as it was accompanied by little or no innovation, like you pointed out. Windows 8 is AT LEAST as powerful as Windows 7 ...And if you view it like me, it's far more powerful. It is not an underpowered, pointless OS/2 system.

I think that Microsoft has honest intentions to bring in new users and they're trying to do it without alienating existing ones. (Notice I didn't say developers!)

sege122

on Jan 19, 2013

Personally I am not whinging about the cost of Windows. I have a TechNet sub and I bought full versions of Windows 7 etc. In fact it doesn't bother me.

I accept Mr General Public buys Windows when he buys a PC. The longevity of XP shows that the generality of people don't 'upgrade' and business spends a lot of time before changing. In one sense I didn't expect any difference with Windows 8.

My issue is understanding the strategy here. If MS want people to use skydrive, office in the cloud, subscription services, metro style apps etc and they want to have a direct relationship with consumers then I don't understand the pricing. If Mr General Public 'upgrades' when he next buys a pc then it is the OEM who is having a relationship with the consumer. This may be years away for people using Windows 7 quite happily.

Upgrading for the average customer needs to be a no-brainer decision, easy, and a value proposition. Most consumers may not even know there is a new Windows version for months into 2013.

Every indication was MS wanted consumers to become their customers directly, buy online, by Windows 8 so they could be sold more online services and move to the new Windows 'metro style' app world. The new price seems to scream the very opposite. It seems to say to consumers that they should just use their Windows 7 PC for a few more years and when they buy another 'device', that may be a pc or tablet, they may find Windows 8 on it. Otherwise they can pay $100+ to 'upgrade' now.

Windows is a premium product if you want to buy it. Ok. I am fine with that. I guess Microsoft is happy to wait the number of years it takes for consumers to buy their next pc so that their OEMs make a sale. This is the old style method that I thought MS was trying to move away from. Maybe not.

raltschwager

on Jan 19, 2013

I totally agree with sege122, I'm disappointed in the lack of strategy shift and not the dollars involved. I was looking forward to spending another $15-30 this summer for a dot 1 release that added some of ideas you mentioned to Metro, perhaps added control panel functions on the Metro side, and was more than a collection of security fixes.

qbob

on Jan 21, 2013

I agree as well. Windows 8 is different to earlier versions in two key areas. Firstly the Microsoft store. Secondly the multi-device play which enables Windows tablets and convertibles to interoperate with other Windows 8 devices. Consumer upgrades have been negligible before, its true, but there was rarely any benefit to the man in the street. Now one can buy a Windows tablet and use it together with your notebook or home desktop. But only if you buy the Windows 8 upgrade, if not you lose a major selling point over Android or iPad. It is argued high pricing is to encourage sales of new devices but how many people will replace a 1-2 year old notebook? It is also argued that we have had the opportunity to take the low cost upgrade but come on most Windows users aren't like us here the interop message will only start to get through to the general public as the year progresses.

This isn't outrage, its curiosity why, having finally come up with version of Windows worth upgrading to, Microsoft decided to forgo the opportunity and continue with the status quo. On the face of it, making money off upgrades and building the Windows store user base would make a lot of sense. Perhaps there is a good reason, e.g. failure rate among upgrades applied by non-technical consumers. Or a bad reason e.g. internal turf wars. Or OEM politics.

developer

on Jan 19, 2013

With Windows 7, the Upgrade version had 5€ price difference from the Full version. I considered it, as not caring for existing customers.

I think they should honour (or "appreciate", you may pick the word you like) existing customers, as they did in the Windows 9x era, and perhaps later (I do not recall past Upgrade/Full version prices, a history of Windows pricing would be useful).

Personally, I was suggesting Windows 8 Upgrade, to all PC users that asked me and needed to have Windows for some reason, even those with Windows 7 (I normally suggest some *buntu Linux release).

Windows 8 Upgrade, at 200$ (I expect it to be 200€ in Europe), does not make sense. If they do not want to sale upgrade licenses, they could just cease the Upgrade offer.

Upgrade offers are, for valuing your existing customers. Yes, they did stop doing it, since sometime ago, but we are not non-thinking fanatics.

I do not expect everyone to agree with me. :-)

ledxizor

on Jan 19, 2013

I listen to windows weekly, and I knew the deal with the temporary pricing... It was a no brainer to upgrade my wife's laptop (which came with windows vista) to windows 8. My desktop pc which had windows 7 was a bit tougher of a decision, but I couldn't resist the 40$ price tag. I installed classic shell to bring back the start menu again (I always do a fresh install and then use ninite, who now offers classic shell). I also disabled boot to metro UI and disabled the charms bar with classic shell.

There are only a few things I like better about windows 8: improved task manager, better file copying, faster boot and shut down times (approx. ten seconds to boot completely using my vertex 4 ssd).

With all the modifications I have done it is slightly better than windows 7, but much better and faster than vista. The only other thing I hope to see is the rumoured ability to purchase a game on the xbox 360 and be able to play it on my windows 8 desktop pc without having to pay for it again. If that happens with major game releases I'd be a loyal microsoft customer for years to come.

GoodThings2Life

on Jan 19, 2013

I do applaud them for the promotional offer, and I'm not whining about the increase-- I bought it cheap at launch-- but I was hoping this would be a permanent change for Microsoft.

It's hard to fathom buying Windows as a subscription someday, but if they want users to buy into Windows Services in the future, they need to keep the base OS cheap.

We don't charge users to upgrade WP8.x releases (and presumably we wouldn't have to pay to go from WP7 to WP8 had they made it an option). We don't pay for OS upgrades on Android or iOS either, and desktop upgrades on Mac are cheap. It was their chance to make OS more affordable forever and push users into services.

goggles

on Jan 19, 2013

interesting that most people don't upgrade from a previous of Windows to next. surely some of these people do upgrade their mobile phones when new operating system is released? wonder what the difference is?

Blattlaus

on Jan 20, 2013

From what I've heard when people had to plug their phones into computers to upgrade, many just skipped it. Its only with the advent of OTA that it picked up. Also if a pop up appeared on someones phone screen saying click hear to be charged $20 to upgrade, I'm going to guess that quite a few would pass.

GraveDigger27

on Jan 19, 2013

As someone who has ALWAYS upgraded my operating system from a previous version to the newest, I have been happy to purchase the Windows 8 upgrade for $40. I upgraded my 2-year old laptop from Windows 7 Home Premium to Windows 8 Pro and think it's a worthwhile investment - even though my system doesn't have a touchscreen display and I had to find compatible drivers on my own (the manufacturer "recommends" Windows 8 but doesn't show compatible drivers for my model...) Once I added drivers for my touchpad as discussed in your article (http://winsupersite.com/windows-8/windows-8-tip-use-trackpad-multi-touch...) and restored the start menu to the desktop using Stardock's Start8 utility I found it a much better experience than Windows 8 right out of the box.

However, I think Microsoft is making a horrible mistake with a 500% increase in pricing - I would never buy Windows 8 Pro at that price to update my existing hardware and that would mean I would only get Windows 8 as part of the purchase of a new machine. Plus I've traditionally built my own desktop systems rather than buying an off-the-shelf box from a local retailer - my current machine (which I built in 2011) is running Windows 7 , which I updated from Windows Vista (and Windows XP...) While I might've considered upgrading that machine again to Windows 8, it's not gonna happen if I have to pay $200 to do it.

I'm a person who first PC was a Kaypro PC compatible running MS-DOS on dual 5 1/4 floppy drives that I purchased based upon a review in Byte magazine (I chose it over an Epson or Leading Edge PC compatible...) I later upgraded it by replacing one of the drives with a 20 MB hard drive before I ended up having to get a Gateway 386 box after the Kaypro was struck by lightning. After that, I built several systems myself and passed my older systems down to my brothers and sisters. I've used every version of Windows since it was introduced (as well as Digital Research's GEM and IBM's OS/2 Warp) and think that Windows 8 is a transitional product as they move from a desktop operating system to one that is better suited for mobile environment (like a tablet or phone...) So I'm hardly a "casual" user - I would consider myself a computer enthusiast and think that Windows 7 and 8 were the best versions of Microsoft Windows to date.

Mike84

on Jan 19, 2013

The most interesting point here is that Microsoft is using the same pricing structure it used in 2009... heck... i don't know... probably 1995.

Microsoft may not want to change - but the exciting thing is - in 2013, the world has changed. Microsoft is not just in the gutter - it's down in the sewers.

Trappist

on Jan 19, 2013

"I think Apple has set the trend here with cheap OS upgrades."

No. Mac market share is so small that practically no-one knows what upgrading OSX costs. That is, Apple's desktop pricing is irrelevant to WP 8.

bdegrande

on Jan 21, 2013

Actually. Apple's share of retail sales (people spending their own money as opposed to corporate buys) is huge, so not only are computer buyers quite aware of what Apple's OS upgrades cost (Mac users, unlike Windows users, DO typically upgrade an OS once or twice before buying a new one), but their pricing applies to all of your Macs, it is not on a per machine basis.

Microsoft is saying with its pricing that no one should upgrade to 8 after 1/31, which makes no sense when you are trying to move people to a new OS which is strategically important for the company. I can't for the life of me understand why an upgrade to Windows 8 Pro is as expensive as a TechNet subscription, which gives you that and so much more.

SamR

on Jan 19, 2013

So what’s with the outrage?

Well Paul, firstly, I would not call it outrage. I would call it more like ..... OK lets just stay with outrage :)

Same price as Windows 7 seems fair right? OK but lets see what has happened since Windows 7 was released in September 2009? Lets see. The iPhone invasion continued, the iPad conquered and Android is clearing up the mess.

Microsoft desperately needs enthusiasts like us to load Windows 8 on their PCs and all their friends and act a little like Apple fans. At $199 we will not do this.

So the not so secret strategy is to "encourage" people to buy a new PC with Windows 8 instead ? Good plan except most of the noobs I know I would recommend an iPad instead. The Surface RT is not anywhere near ready, the Pro is too pricey and I would never recommend a version one of anything.

I am actually hoping Microsoft gets its act together, I bought an iPad 4 after much soul searching but buying a Mac is a bridge too far.

MistyMuffinDonut

on Jan 20, 2013

It's amazing how people still want things cheap and don't want to fork out the recommended price that Microsoft are asking now for Windows 8. I got in early and got it cheap, with a new laptop so I'm happy. Microsoft were careful to say that this was a limited time offer. Yet people think they are entitled for something cheap even after the promotion runs out? LOL.

Hey I'd be happy to pay full price for Windows 8 for my other PC in the lounge room. It's a marvellous system. I already went for the promotional offer, does not mean I should go out and buy another one and that I deserve a second cheap Windows 8 OS. For me that doesn't work like that. :)

Daniel D

on Jan 20, 2013

Your article Paul is of course factually correct. Microsoft are effectively going back to what they know in the Windows 7 days for pricing.

Problem is the rest of the industry isn't winding back so conveniently for them. Amazon is still growing its Kindle market and diversifying and reducing the costs of its services. Android is gaining even larger market shares in phones and tablets and Google is in the process of relaunching Google TV. Apple is struggling a bit, but it too is showing sigs it had to realign its pricing agains't Android with the mini iPad and seems poised to give the iPhone a makeover because its starting to show its age..

In short the world is changing to cheaper hardware and software and Microsofts response? We are going back to what we know.

When I look at Windows 8 Phone I see Commodore Amiga. Technology superior but the market doesn't know or care about it and the company making it are clueless about how to sell it or where to sell it.

When I look at Microsoft Windows I see IBM in the days when IBM thought they were still pulling the strings, as those cheap knockoff computers would never take any real market share from them. Steady as she goes, OS2 will fix everything...

As a Windows developer is where I am personally happy or comfortable about. Windows 8 is shaping up as the usual Microsoft half hearted attempt. Microsofts lack of commitment to winning marketshare for their new products and adopting a pricing model that reflects the future, not their past smacks of a company that just can't adapt. Cheap computers and tablets are not going away. Consumers expect them and if Microsoft doesn't someone else (currently Google) will.

This isn't the same market that Windows 7 launched into and Windows 8 needs more of a helling hand by Microsoft to establish itself and to set the groundwork for Windows 9.

pthurrott

on Jan 20, 2013

Here's the deal.

The outrage over this "hike" is completely manufactured. And talk about Microsoft not getting it because the rest of the world has moved on or whatever is incorrect and besides the point.

Seriously, let's just think about this for a moment.

Windows 8 is a hybrid OS. It serves two markets: Mobile (new) and classic PC (old).

Upgrades are only for old-school traditional computers. There are no "Windows 7 devices," just PCs. That this Upgrade package would follow the old-school pricing model is both logical and acceptable: People who upgrade to Windows 8 from a previous Windows version will get the upgrade the expect plus the new mobile stuff that is largely irrelevant on their PCs.

People who buy new devices don't need to think/worry about this upgrade. They're doing the mobile thing.

Now, if Microsoft charges $200 for a Windows 9 Upgrade in three years, yes, they're in trouble. But today? This is a complete and utter non-issue. Virtually everyone who wanted/wants this Upgrade already has it and got it cheaply. And supporting the unreal combination of PC types out there is in fact very expensive for Microsoft. So the pricing is in fact even justified.

This is a complete non-issue.

brians (not verified)

on Jan 20, 2013

Paul, the change in pricing in the rest of the world, occurred years ago. Apple lowered their upgrade price to $29.99 with the release of Snow Leopard. Then Lion was also $29.99 and then Mountain Lion was $19.99. Free upgrades in the non-Desktop world have been there for years as well. Why would three additional years need to pass before Microsoft is in trouble?

pthurrott

on Jan 20, 2013

Untrue.

Mac OS X is subsidized by hardware purchases. As I noted previously, the average selling price of a Mac laptop in Q4 in the US was $1400. The average selling price of a PC laptop was $420. So Macs aren't just a bit more expensive, or twice as expensive, they are an order of magnitude more expensive. Apple has some balls for charging users *anything* for an upgrade.

Meanwhile, this was the cheapest upgrade in the history of Windows (for "real" or major upgrades): $15 for PC buyers and $40 for everyone else, with no restrictions at all. It was just a limited time offer as previously announced, and one aimed at when the few people who do in fact upgrade PCs would do so.

This is not a problem in the slightest.

SamR

on Jan 20, 2013

"Now, if Microsoft charges $200 for a Windows 9 Upgrade in three years, yes, they're in trouble. But today?"

Paul I just had a thought ..... it happens occasionally.

What happens in just over 12 months when 500 million XP users "discover" they are out in the cold?

Will they pay $200 to upgrade their PCs which are worth probably less than $200?

Will they buy a new PC?

Will they buy an iPad, Android or even a Surface tablet?

Microsoft next year will either get a huge financial boost or ..... Not.

This could explain the price "jump", big money at stake. What's 200 times 500 million?

scophi

on Jan 20, 2013

I'm not outraged at the price shift, but perplexed.

Premise: Microsoft has bet the farm on this re-imagining. It is imperative that they drive as many people as possible to the new OS and to the Windows Store.

Condition: Windows 8 is not doing as well as they had hoped and people are hesitant to make the jump. MS has polarized it's user base, something it did not want to do given it's previous 75-80% global share. And MS needs as many home users as possible to make the switch in order to offset the lack of corporate purchases.

Result: Promo or not, they are effectively tripling the cost of an under-performing product.

This seems to be a poor strategy. Hardware sales are slumping globally. So the last thing MS should do is impede software sales. But that's what they are doing.

Why not extend the promo pricing? Take the long-term view. MS needs to make this transition happen. Increasing the prices does not generate any goodwill toward the company or its new product.

Bottom-line: don't raise prices on transitional products. It's just bad business.

Spektor

on Jan 20, 2013

"Outrage"? I don't think that any rational adult would suffer "outrage" over this issue. Disappointment perhaps, but not outrage.

It's disappointing because such a large price hike will only supress sales of W8 even further for the upgrade market. And for those hoping MS does not end up bankrupting itself over the overall poor reaction to W8 thus far, supressing sales further is not helpful.

I bought a W8 upgrade for my old laptop on the weekend it was offered for download. Then, after days of problems and dissatisfaction with the new UI, I downgraded back to 7. 8 is just not my thing. I may download one of the $19 W8 upgrade offers for my second, new Win7 laptop, but only so I can re-sell the 8 disk on Ebay after the price hike.

The fact is MS may not care as much about the upgrade market anyway. They realize 8 fares poorly (less-well) on existing, non-touchscreen PCs and so they may be focusing their efforts on just pushing 8 on new hardware sales.

pthurrott

on Jan 20, 2013

I've seen plenty of outrage, which is why I used that term. Here, email, and Twitter.

Spektor

on Jan 20, 2013

You know you have a serious problem on your hand when your brand new multibillion dollar OS trends with "outrage". On so many levels.

pthurrott

on Jan 20, 2013

This is the tech elite/tech enthusiasts, not the norm. This pricing does't affect normal users in the slightest.

brians (not verified)

on Jan 20, 2013

I agree with your use of outrage here, there is outrage. I suggest you look over on Google News (or well, Bing News)... you'll find plenty of articles with ledes like "Microsoft raises upgrade pricing 500%". The thing I don't understand is that among journalist, you seem to be the only one who is NOT outraged or at least thoroughly perplexed as to why Microsoft would do this.

The upgrade price itself only symbolic of the real issue. Microsoft is totally ignoring what the customer wants and needs. Customers made it clear over the holidays, they do not want touch on laptops, they do not want tablets combined with laptops, nor do they want tablets running desktop OSes. They want inexpensive, easy to use laptops that get their tasks done. They want inexpensive tablets that let them Facebook, web browse and play games.

I pointed to several articles about this in my personal blog yesterday:
http://computingcompendium.blogspot.com/2013/01/microsoft-continues-down...

realtestman

on Jan 21, 2013

brians, there are plenty of articles that state that Vista was an abomination. Hell there's plenty of articles that stated that XP pre-SP2 was an abomination. Doesn't make it factual - they weren't.

developer

on Jan 20, 2013

So Paul, the rationale for the expensive Upgrade, is that "noone will buy it anyway"?

Then why do they sell it? With no expected Upgrade sales, shouldn't the objective be large market percentage?

This is a company approach, not some random dude selling his own stuff.

rsmith4321

on Jan 20, 2013

I'm a normal user, and I've already upgraded so this doesn't actually effect me. But it sure does make me think Microsoft is holding on to an out of date business model. Public opinion is very important, wouldn't Microsoft be better of charging $40 then having everyone talk about how out of touch they are with reality. It doesn't matter if it's fair, or if it's any different than Windows 7, it's just the way things are and they need to deal with it. As a normal user, I hope for a day when I can work with just a Chromebook.

jsullyboy

on Jan 20, 2013

Too bad. The upgrade price was a great deal. I deliberately did not tell my Dad about Windows 8. He is in his 70s and I did not want to take on the technical support calls of his using Windows 8.

One day when I was visiting he said to me. Why didn't you tell me about Windows 8? He had upgraded his computer on his own and he could not stop talking about how much he loved it.

I though he would be confused about the desktop/metro world etc. But all he has said since October is how much better his computer is with windows 8.

So if my Dad in his 70s could upgrade his computer to Windows 8 without any help and love the experience isn't this the goal? If the price was $200 he probably would not have done it and he wouldn't be telling all his friends how much he likes it.

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